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Ocean Thermal Energy Conversion (OTEC) has the Attention of the Department of the Navy
OTEC
Ocean Thermal Energy Conversion (OTEC) technology has caught the attention of maritime countries and even the Department of the Navy. On February 25, 2010, the DON announced its renewed commitment to research and development of OTEC systems, and has partnered with private industry to explore 3rd generation systems for use around the world.
OTEC is nothing new, dating back to the 1880s. It relies on the temperature difference between top and bottom layers of the oceans (difference must be at least 20 degrees, making it optimally suited for tropic & sub-tropic climates. This month, Hawaii announced development of a 100MW plant, costing $400 million, to provide power for Honolulu.
Use of the ocean as an energy source has received increased attention in the past decade, with experimentation in wave capture and maritime wind to generate power. But OTEC offers unique, and almost unlimited potential for development, with more than 70% of the earth’s surface contained in oceans. Even backyard projects have used water in lakes and oceans to produce “air conditioning for homes, and heat recovery for winter use. These home-sized operations pale in comparison to the potential in OTEC development.
One of the unique by-products of using an open OTEC process is the “creation” of water that is virtually pure. Consequently, OTEC becomes invaluable for Middle East countries, where water desalinization supplies huge amounts of purified, potable ocean water. A hybrid OTEC unit could supply both the water and energy needs for many countries of the region.
Along the coastlines of Latin America, the islands of the Caribbean and northern South America, power generation systems offer the potential to open up industrial development opportunities. Jamaica, for example, has committed to building a sizeable facility to provide power for the island.
Bringing OTEC into the realm of the common, however, is a capital-intense effort. Yet, the per-unit production cost for OTEC energy is comparable to other renewable energy sources. Additionally, improvements in technology may lead to the ability to generate and store hydrogen as a co-product of the OTEC process.
Conventional lenders have been somewhat reluctant to finance OTEC plants, due to the high costs of construction. However, a variety of innovative venture capital funds are opening up opportunities for new plant erection.
What is needed to stimulate investment in OTEC is the formation of symbiotic partnerships, by marrying research facilities, investors, and governments intent on achieving the highest levels of renewable energy reliance. As the processes and systems become scalable, new opportunities for those partnerships will emerge.
As OTEC technology evolves, as well, to lower the temperature variance needed to efficiently produce energy, more temperate climates will be able to explore OTEC opportunities.
But even without those advances or partnerships, the potential for financial gain for investors is significantly large that what may be needed is not new technology & processes, or new partnerships, but new investment vehicles that will allow the capital currently parked on Wall Street sidelines to move into this opportunity for profit. In the same way that ETFs allowed living-room investors to invest in the stock market with reduced risk, new stock alternatives for investment in green technologies are anticipated to stimulate renewed interest in renewable energy investments.
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